The toy industry is facing significant challenges amidst escalating tensions in international trade.
Leading toy manufacturers Mattel and Hasbro have witnessed a sharp decline in their stock values due to the ongoing trade conflict initiated by President Donald Trump.
Mattel’s stock plummeted to a 52-week low on Friday, trading at $13.95—reflecting a 27% decrease from the announcement of the aggressive “reciprocal tariff” policy last week. Similarly, rival Hasbro’s shares dropped to a 52-week low of $49 as of Wednesday, marking a decline of over 20% during the same timeframe.
Both companies heavily depend on supply chains in China, leaving them vulnerable to shifts in trade regulation. Bank of America reports that approximately 40% of the products these firms sell in the U.S. are sourced from China.
In the latest developments, Trump announced severe tariffs on imports from a range of countries last week, with China receiving particularly high rates. As of Wednesday, however, the tariffs for most countries were standardized at a blanket 10% rate, while China faced significantly higher allegations.
Currently, the U.S. imposes a staggering 145% tariff on imports from China. In retaliation, China has enacted its own tariffs, which include a 125% levy on U.S. goods.
Profit margins for traditional toys are usually modest, sitting in the high single digits. This leaves little flexibility for companies to absorb increased costs from these new tariffs. Analysts predict that the entire burden of the tariffs will likely be shifted onto consumers, resulting in higher retail prices.
These anticipated price increases could cause certain toy products to see their prices double, coinciding uncomfortably with the upcoming back-to-school shopping season.
— Contributions from Finance Newso’s Tom Rotunno have informed this report.
